From 2020 to 2021, the global resource abundance plummeted. The drop of 22.6% was double the previous most significant one year drop of 11.3% in 2010. While this highlights the negative impacts of the COVID-19 pandemic globally, look at how our current value is still 448.5% higher than it was in 1980:
Yes, it is now much lower than the peak of 708.4 that we had in 2020. As a result, 88% of the commodities measured (44 out of 50) became more expensive in 2021. In particular, energy prices increased by a whopping 131.4%.
Only six commodities decreased their relative cost from 2020 to 2021, including bananas, tea, plywood, tobacco, rice, and groundnuts.
However, according to the Simon Abundance Index (SAI), global resource abundance has still doubled every 16.7 years since 1980. It means that we are much more likely to be able to afford 50 of the most common commodities with much fewer working hours than we did in 1980. We can buy more food after less time at work than our parents and grandparents used to be able to. Same with energy, materials, metals and minerals.
Having more people worldwide doesn’t make everything more expensive and scarce either. For every 1% increase in the world’s population, the average time price of these commodities decreases by 0.88%. Our personal resource abundance (2.69%) and population resource abundance (5.8%) increase for every 1% increase in the global population.
As Julian Simon noted in his 1996 book The Ultimate Resource 2:
“The ultimate resource is people — skilled, spirited and hopeful people who will exert their wills and imaginations for their benefit, and so, inevitably, for the benefit of us all…(in the future) there will be more people to solve problems and the bonus of lower costs and less scarcity.”
Resource abundance is still growing at a faster rate than the global population. The threat to our economic well-being is not an increasing population. The fiscal decisions by countries prioritised people’s lives during the pandemic, reduced work output, and increased inflation rates through the printing of money. Now that more people are returning to work, countries should print less additional money for people not working, entrepreneurship will increase, and our global abundance is likely to rise again. If you don’t believe me, look at how the world responded to the 2008 global financial crisis from the years 2011 to 2020.
Many thanks to Marian L. Tupy and Gale Pooley for the excellent data in their Human Progress article on The Simon Abundance Index 2022.
Dr Damon Ashworth